Gaming

Modern Warfare

Clockwise from top left: Inside the Activision E3 preview held at the Staples Center on June 14, 2010; Vincent Zampella (left) and Jason West accept the Best Shooter award for Call of Duty: Modern Warfare at Spike TV's 7th Annual Video Game Awards on December 12, 2009; a still from Modern Warfare 2., By Michael Buckner/Activision/Getty Images (top left), Kevork Djansezian/Getty Images (right).

The video-game industry is currently waiting with bated breath for the release of Titanfall, the new sci-fi shoot-’em-up project from developers Vincent Zampella and Jason West. The game, which will be the talk of this week’s Electronic Entertainment Expo, is expected to be big—Zampella and West are best known for their multi-billion dollar game series, Call of Duty. But the real-life battle between the pair and their former employers, Call of Duty publisher Activision Blizzard, is turning out to be nearly as vicious as the on-screen fights Zampella and West are so good at rendering realistic.

The first thing you notice when you walk into the Electronic Entertainment Expo—E3 to those in the know—is the volume. It’s an eardrum-rattling, goose-bump-inducing, I-hate-my-neighbors sort of noise. It’s the noise comes from a thousand video games played all at once and at full volume: soldiers spraying clip after M16 clip, kung fu masters battling to the death, genetically altered monsters marauding through post-apocalyptic cities. There are less grating, almost pleasant sounds, too—a touchdown cheer in a football game, for instance—but you really have to listen for them.

Video games, especially those big-budget commercial releases for the Sony Playstation and Microsoft Xbox, are famously (some would say notoriously) violent. But, of course, the on-screen fighting is all make believe. It’s in the boardrooms and cubicles of the $60 billion video-game industry where you find the real carnage.

Case in point: Titanfall, a sci-fi shoot-’em-up,that was shown off for the first time yesterday morning at a Microsoft press conference. The release is among the year’s most hotly anticipated, and it represents an end to a bloody corporate battle that pitted the brash C.E.O. of the world’s largest video-game publisher, Activision Blizzard’s Robert Kotick, against two of the industry’s most successful game developers, Call of Duty creators Vincent Zampella and Jason West. The fight, which would ultimately involve allegations of corporate espionage, intimidation, and fraud, was all the more strange because Kotick’s collaboration with West and Zampella, who founded Respawn in 2010 after leaving Activision, had been one of the most lucrative in the game industry’s 40-year history.

West and Zampella’s last title for Activision, Call of Duty: Modern Warfare 2—a military simulation that takes players through Russian gulags, Brazilian favelas, and a besieged Washington, D.C.—went on sale at midnight on November 10, 2009, and within 24 hours had sold nearly five million copies. Its first-day gross, $310 million, easily topped that of any movie, book, album, or other video game that went on sale that year. In a triumphant press release, Kotick, their boss at the time, called it “the largest entertainment launch in history.” By January, Modern Warfare 2 had surpassed $1 billion in gross sales.

But in March, just months after their resounding success, West and Zampella say they were summoned to Activision’s headquarters in Santa Monica, California, where they were escorted, separately, by a detail of thick-necked security guards wearing communications earpieces into a conference room, where they were met by a lawyer and Activision’s head of human resources. According to West and Zampella, they were told they could not return to their offices, could not talk to their former colleagues, and—oh yes—would not be receiving the $36 million in bonuses and royalties they’d been expecting. (Activision declined to coment.)

“I was speechless,” West told me when I interviewed him two years ago at E3. “In my head, this was the moment when everyone was supposed to go home in a limousine. Instead, we were eating the seed corn and they were taking all the money.” West drove home, broke the bad news to his wife, and got drunk. Zampella spent the evening having a talk with his son to prepare him for what he might hear about the incident in school.

Then the two men went to war.

That same week, they sued Activision for wrongful termination, seeking to recover bonuses and control of their billion-dollar franchise. The following month, they announced that they had founded Respawn—video-game jargon for what happens when a character dies and digitally reincarnates—and would be hiring. They rented a cheap office in the San Fernando Valley, set up a bare-bones Web site, and began to lure dozens of developers from Activision, financing all of this with a large advance from Electronic Arts, Activision’s main rival.

Signing the two hottest guys in video games was a major coup for EA, but for Activision it was treasonous. In a countersuit in April 2010, Activision alleged that West and Zampella were not the naïve artists they claimed to be; they were co-conspirators, “small-minded executives,” motivated by “envy and personal greed.” The suit claimed that West and Zampella had colluded with EA to get themselves fired and set up a rival studio. “The things they did,” Kotick, the Activision C.E.O., said in an interview with a gaming magazine, “I would go to jail if I did them.”

Disputes like this one have become surprisingly common in the video-game industry. “It’s the timeless struggle between the suits and the ponytails,” says Trip Hawkins, a longtime game executive who founded Electronic Arts in 1982. “It’s an ideological conflict,” Hawkins says. “The suits are driven by money and power. The ponytails don’t hate money, but what they really care about are ideas and artistic expression.” There’s truth in this story, but it also leaves out an important point: it’s not always easy to tell suits from ponytails.

In the past 20 years, video-game design has professionalized, with dozens of colleges offering master’s and bachelor’s degrees in the craft. The University of Southern California has the top program in the country, according to the Princeton Review’s annual rankings, and there is an entire university dedicated to producing video-game developers, the DigiPen Institute of Technology in Redmond, Washington, which boasts an enrollment of nearly 1,000 undergraduates.

But in the early 1990s, when West and Zampella were breaking into the business, making video games was still a fringe pursuit, undertaken largely by Dungeons & Dragons enthusiasts who’d failed at most everything else. West, 40, has a quick wit, but he looks a bit like the comic-book geek on The Simpsons, with a gut, a goatee, and a thin, long ponytail of black hair. He learned to write computer programs at age nine and spent much of his early childhood playing text-based role-playing games on a primitive P.C. He struggled through two years at the University of Texas before dropping out and moving back home to Dallas. He finished college at the University of North Texas, where his dad taught physics and where, more importantly to him, a group of computer-science majors had started a video-game club.

Zampella, 43, is the business mind. He has close-cropped blond hair and generally cleans up a bit better than West, but he’s awkward in conversation, speaking in a soft voice with a slight lisp. He got into the game business after a brief, unsuccessful stint at Broward Community College in Florida, followed by work as a handyman. With the help of a friend who worked at a computer store, Zampella talked his way into an entry-level job at a local game company, answering phones and testing new releases.

The pair first met in 1997, when Zampella, who had become a producer at SegaSoft, hired the Dallas video-game company where West worked to build a role-playing game called Skies. The working relationship became a friendship, and two years later, when West took a job as the lead developer at an obscure Tulsa, Oklahoma, game start-up called 2015, he convinced Zampella to join him as lead producer. Their first game, Medal of Honor: Allied Assault, was commissioned by EA in 2000 as a P.C. version of Medal of Honor—a big-budget Playstation game produced by DreamWorks Interactive, published by EA, and created by Steven Spielberg.

Because games made for consoles like the Playstation and Xbox outsell P.C. games by a wide margin, EA seems to have viewed Allied Assault as an inexpensive side project, awarding the contract to 2015 despite the fact that the two-year-old studio had never produced a full-length game. Tom Kudirka, 2015’s founder and C.E.O., landed the deal thanks to a recommendation from a friend at a well-established studio, staffing the company with amateur developers he’d found on Web forums.

Two years later, this inexperienced group delivered a game to EA that was at least as promising as the original Medal of Honor. Up to that point, game designers had instructed players on what to do using blinking arrows or on-screen text, which was an inelegant but effective way to keep players from walking into walls or getting lost in spaceships. But in their rendition of the Allied invasion of Normandy, West’s team introduced a storytelling innovation: they put the game’s instructions in the mouths of commanding officers, making Allied Assault feel more like a movie than a game. “I was blown away,” says Danny Bilson, a professor of game writing at U.S.C. and an executive vice president at the game company THQ. At the time, Bilson oversaw the entire Medal of Honor series as a producer for EA. “It was one of the most immersive things I’d ever seen,” he says. Released in January 2002, Allied Assault would sell over a million copies in its first 10 months, a huge take that made it one of the most successful P.C. games in history. Ten years later, it still has a devoted following.

The success of Allied Assault was less a coup for 2015 than it was for Zampella, who, according to a lawsuit filed against him by 2015’s Kudirka and two other former 2015 executives, immediately began plotting a way to strike out on his own. The lawsuit, which contains startlingly similar allegations to those that would be made by Activision a decade later, claims that Zampella began negotiating with EA through an intermediary and organized secret weekly meetings at a local Tex-Mex joint, during which he conceived a plan to leave 2015 and start a competing studio, known as Infinity Ward. Salaries and job titles were planned, the renting of office space was discussed, and a time line was drawn up.

Zampella and West say there was no conspiracy, but no one disputes what happened next. In the days before Allied Assault’s release, Kudirka’s team rose up against him. Each day, Kudirka would come to the office and find a handful of resignation letters slipped under his door. By the end of January, 20 of Kudirka’s 27 developers had turned in letters. “People don’t have any idea that Jason and Vince did the exact same thing to me that they’re doing to Activision,” says Kudirka. “I was a tough boss. But those guys screwed me over pretty good.”

These allegations have never been reported in the press, and West and Zampella clammed up the first time I asked them what happened. Zampella laughed awkwardly. “Things happened,” was all West would offer. (Later, Robert Schwartz, Respawn’s lawyer, denied that West and Zampella had organized a walk-out at 2015.) Then he changed the subject and telling me about the idyllic conditions at Infinity Ward following the group’s departure from 2015. Decisions were made communally, with employees sitting on the floor in a circle. “We just wanted to make kick-ass games,” West says. “That’s what it was about.”

When an advance to develop a new game for EA failed to materialize, West and Zampella offered their services to EA’s chief competitor, which jumped at the chance to do business with them. Activision paid $1.5 million for a 30 percent stake in Infinity Ward. The lawsuit was quietly settled. As part of the deal, Activision received the right to buy the remaining 70 percent of the studio at the same valuation and acquired Infinity Ward outright for an additional $3.5 million the following year.

Bobby Kotick was just 27 years old—about the same age as Jason West at the time of Infinity Ward’s founding—when he bought Activision out of bankruptcy in 1990. Kotick, who had already started two software companies, was wildly ambitious and well connected. He wasn’t much of a gamer, but he’d become convinced that the game business represented a huge investment opportunity. With help from his mentor (casino mogul Steve Wynn) and two other partners, Kotick paid $440,000 to acquire a 30 percent stake in Activision and became its C.E.O..

It was an odd marriage. Activision had been founded as an artist’s redoubt in 1979 by four fed-up developers from Atari who felt they weren’t getting the credit or the money they deserved. (In an interview with Fortune, Atari’s C.E.O. had maligned his developers’ contribution, calling them “high-strung prima donnas.”) “We asked for a little recognition, similar to that afforded a book author,” Activision co-founder David Crane told me in an e-mail. “When we were told we were no more important to the success of a game than the assembly-line worker who built it, we left the company.” Activision paid designers bonuses tied to profits and included Hollywood-style credits with each game. Developers wore T-shirts with the words “Just Another High-Strung Prima Donna” printed across the chest.

The company flourished in its early years, but its success inspired competitors with similar business models, and even similar ideologies. Electronic Arts was founded by Hawkins, a former marketing executive at Apple Computer, in 1982 as a haven for game developers—or, as Hawkins called them in the company’s early days, “software artists.” EA’s name was a reference to United Artists, the production company that Charlie Chaplin, Douglas Fairbanks, and Mary Pickford founded in 1919, and whose founding struck the first blow against the studio system.

But in the mid-1980s, growth in the video-game industry slowed dramatically, and the idealistic ambitions of both companies gave way to more pressing concerns. Hawkins left EA in 1991 and was replaced as C.E.O. by Larry Probst, a former Clorox executive, whose pioneering strategy, which would be adopted by Kotick as well, was to pump out sequels to a handful of successful franchises, including John Madden Football and Sim City.

Activision, on the other hand, struggled mightily just to stay solvent. Facing declining sales, a $3.5 million patent-infringement judgment, and a dearth of new games in the pipeline, the company renamed itself Mediagenic and focused on developing business software. By 1990, it was on the verge of bankruptcy.

Over the next decade, Kotick presided over a remarkable turnaround. He brought back the Activision name, laid off almost everybody, and moved the company from Silicon Valley to Los Angeles, where it would not have to compete with EA for talent. He hired managers from the consumer-products industry and asked developers to take responsibility not just for their games’ quality but also for their profitability. His goal, he later joked, had been to “take the fun out of video games.”

This approach played well on Wall Street, and Activision’s stock soared past that of EA. A Forbes cover story outlining Kotick’s accomplishments called him “Activision’s Unlikely Hero.” But to gamers, Kotick was pure evil. Comments on Internet forums compare him to the Superman villain Lex Luthor, Dr. Seuss’s Grinch, and inevitably, Adolf Hitler. Developers speak of a corporate culture that values profit above all else: “He definitely has that kind of widget-maker attitude,” Tim Schafer, a game developer and longtime Kotick critic, once told Eurogamer. “His obligation is to his shareholders. Well, he doesn’t have to be as much of a dick about it.”

Even so, West and Zampella initially thrived under Kotick’s regime. They released Call of Duty games for Activision in 2003 and 2005, the second of which was chosen as a launch title for Microsoft’s Xbox 360 game system and moved more than a million copies in its first year. Still, West says, Activision’s focus on developing wildly profitable franchises and then milking them for all they were worth quickly grew stifling. He longed to let his imagination run beyond the narrow bounds imposed by historical fiction. He imagined a war game that would use contemporary weapons and tactics, while addressing anxieties about terrorism and violence. World War II had a clear hero and a clear villain; war in the modern era is full of ambiguity.

At a steak house not far from Respawn’s headquarters—and supervised by a publicist and a lawyer—I asked West if there were times when Infinity Ward had clashed creatively with its bosses. He paused for a minute. “Well, Activision wanted us to make another World War II game,” said West, his words clipped, his voice rising. “So that’d be an example of when we pushed for something creatively. And now they have billions of dollars they didn’t have before.”

Zampella finished his thought. “We’re such jerks,” he said.

West and Zampella have been using this line since at least 2009, when West told PlayStation magazine, “We had to fight for everything.” It’s also an oddly ungenerous position, given that Kotick agreed to finance the risky new war game and spent lavishly to market it. Released in 2007 as Call of Duty 4: Modern Warfare (most gamers simply call it Modern Warfare), the title sold more than 10 million units in its first nine months, received glowing reviews, and took top honors at the Interactive Achievement Awards, the industry’s equivalent of the Oscars.

For West and Zampella, this sudden success was fortuitous, coming just months before their contract with Activision was due to expire. Activision wanted a second Modern Warfare, and seemed to want it badly. Kotick was negotiating his company’s merger with Vivendi Games, and his only other major title, Guitar Hero, was facing stiff competition from a similar game, Rock Band. Dealt a winning hand, West and Zampella went all in: they agreed to Kotick’s demand that they deliver Modern Warfare 2 for the 2009 holiday season—giving Activision a likely blockbuster for that year—in exchange for a bonus plan that had the potential to make them among the highest-paid video-game developers in the industry. They also got the thing they’d wanted all along: creative control.

Kotick gave West and Zampella the equivalent of final cut on the entire Modern Warfare franchise, including the power to block any subsequent sequels. This was unprecedented at Activision and rare in the industry. As part of the agreement, West and Zampella were allowed to operate almost completely autonomously. Whereas other studios had to submit their finished games to their bosses for quality testing several months before the release dates, Infinity Ward was allowed to handle this task internally. The upshot was that no one among Activision’s top brass would play Modern Warfare 2 until the general public did. (“We were giving up some control,” concedes Steven Marenberg, a lawyer who initially served as Activision’s lead council. “It gave them comfort and we wanted them to feel comfortable and motivated.”)

Kotick did build a loophole into the deal: if West and Zampella were fired, rights to the games would revert to Activision. West and Zampella, who negotiated the arrangement without an agent, say they didn’t initially appreciate the ramifications of this last clause. “It’s not like Hollywood, where you can just read Variety and see what deal somebody got,” West says. “I had Vince to represent me, and Vince had me to represent him. That’s how we got by.”

During an hour-long interview in the summer of 2011, Kotick, sporting a sweater vest over a white T-shirt, waxed nostalgic about his past and emphasized that he’d negotiated in good faith. But he refused to respond to West and Zampella’s most explosive allegation: that Activision began trying to fire them only months after the 2008 contract had been signed. Court filings reveal that in an e-mail exchange between two executives charged with overseeing West and Zampella in January 2009, one warned that the risks of firing the pair would be great. “Is everyone ready for the big, negative PR story this is going to turn into if we kick them out?” he asked. “Freaking me out a little.”

The apparent effort to find a pretext to replace West and Zampella became known within Activision’s top ranks as “Project Icebreaker”—the code name seemingly straight out of a video-game villain’s playbook. It was undertaken in part by a former I.T. director, Thomas Fenady, who in a deposition claimed he was ordered by Activision’s former chief legal officer, George Rose, to “dig up dirt on Jason and Vince.”

Fenady testified that Rose instructed him to hack into West and Zampella’s computers, cell phones, and e-mail accounts. “We’re sick of dealing with these guys, their egos. They’re difficult to work with,” Rose allegedly told him. “We just want to get rid of them.” (Rose denied having asked Fenady to “dig up dirt” on the two but admitted to asking Fenady to monitor e-mails.) Fenady said he asked about the repercussions of a secret investigation and remembers being told, “This comes from Bobby directly. . . . Don’t worry about repercussions.” Accoding to Fenady, there were discussions about creating a ruse—possibilities included a fake fire drill or a building fumigation—to give Activision investigators time to sneak into the Infinity Ward offices and copy their e-mails. They eventually tried to hire a private security firm to hack the e-mails. (The security firm refused, citing legal concerns.)

In the meantime, Kotick’s deputies busied themselves with trying to find their replacements. PowerPoint slides from late 2009 compare the pay packages of West and Zampella—who each made $16.3 million in 2008 alone—with the meager salaries of their eventual replacements, Steve Pearce and Steve Ackrich. Around the same time, Activision awarded stock grants to Infinity Ward’s key employees, apparently to entice them to stay at the company.

For their part, West and Zampella tried unsuccessfully to block the stock grants, and rebelled against Activision in ways large and small. According to a deposition from a senior Activision executive, they blew off meetings, insulted managers, and generally acted like, well, high-strung prima donnas. West frequently explained his resistance to various directives with the mantra, “I’m not getting back to my happy place.” During one particularly heated exchange, according to the deposition, West and Zampella threatened to not participate in the E3 demo for Modern Warfare 2, hanging up on Activision vice-chairman Mike Griffith during a conference call. Kotick, when told of the rebellion, suggested in an email that Griffith “change their locks and lock them out of their building.”

In the months leading up to the release—and wild success—of Modern Warfare 2, West and Zampella began trying to renegotiate their contract. They felt that Activision had been meddling with their studio and asked to spin out Infinity Ward as an independent company with Activision as its publisher. They would not be Bobby Kotick’s employees, and Infinity Ward, not Activision, would own the games they made. They hired an agent, Seamus Blackley of CAA, and threatened to use their creative-control provision to block the development of any future Modern Warfare games if their demands were not met. West told me he had no intention of leaving Activision, but that he and Zampella had no choice but to weigh their options. “We weren’t trying to plan a future outside of Activision,” West insisted. “We were just planning a future.”

But Kotick refused to negotiate, or even meet with Blackley. “West and Zampella are talented guys,” Kotick says. “This dispute wasn’t about that. It was about their conduct. It would have sent a bad message and badly affected the culture of our company if we had tolerated what they were doing.” In August, Blackley arranged for a private jet to take West and Zampella to Silicon Valley for a secret meeting at the home of EA C.E.O. John Riccitiello.

In February 2010, Activision hired a law firm to launch an official investigation into possible misconduct, which included interviews, conducted under oath, with West, Zampella, and their employees. According to a separate complaint filed by former Infinity Ward developers who joined West and Zampella’s suit, employees were told not to discuss the investigation with anyone and were forbidden from hiring lawyers. Security guards became a regular fixture at Infinity Ward’s offices. The atmosphere, according to the lawsuit, was that of a “police state.”

In an early level of Modern Warfare 2, you assume the role of a young special-forces recruit assigned to go undercover with a Russian terrorist cell. “Yesterday you were a soldier on the front lines,” intones Lieutenant General Shepherd, your gruff and almost comically amoral commander, voiced by the actor Lance Henriksen. “But today, the front lines are history.” He warns that your mission will involve significant collateral damage, and “will cost nothing compared to everything you’ll save.”

Moments later, you find yourself in a crowded international airport as your Russian compatriots begin indiscriminately mowing down travelers. There’s an automatic weapon in your hand, and as you watch the terrorists slay innocent people, you begin to wonder what will happen if you join in by tapping the “X” button.

It is possible to complete the level, “No Russian,” without shooting any civilians; you can simply hang back as the terrorists kill people. But most players follow General Shepherd’s instructions and start firing, killing dozens of screaming travelers. Whatever you do, the scene ends with a dramatic plot twist. Just as you try to hop into the back of a getaway van, your comrades throw you to the ground and shoot you in the head. As you expire, you learn that the terrorists knew you were an American the whole time; you’ve been set up.

It’s fitting that the level, which was controversial even within the video-game industry, became West and Zampella’s artistic calling card. The story of double agents and deep-cover espionage almost perfectly encapsulates their own penetration of the corporate entertainment world. As Kotick put it, “These guys are sophisticated businessmen and entrepreneurs”—in short, a lot like him. “They negotiate deals with the biggest companies and hire the best lawyers.”

In the months leading up to the trial, West and Zampella’s demands for damages increased from $36 million to more than $1 billion to account, in part, for possible future earnings, and Activision started to act defensively. In an S.E.C. filing on May 9, 2012, the company disclosed that it had begun setting aside cash in case a verdict in the lawsuit went against it. The following day, Activision announced that it had hired D.C. power lawyer Beth Wilkinson, a former army captain who led the government’s successful prosecution of Timothy McVeigh to lead the trial. Wilkinson immediately asked for a delay to get up to speed on the case, but her request was denied.

A few days later, Activision, which had steadfastly refused to pay bonuses to former Infinity Ward developers who had defected to Respawn and joined West and Zampella’s suit, announced a reversal: it would immediately pay them a total of $42 million. The company also announced that it had reached a settlement with EA over the alleged poaching of West and Zampella. With the trial only days away, it offered West and Zampella a settlement thought to be in the tens of millions of dollars. They accepted.

In a statement, EA called the settlement, “a vindication of Vince and Jason, and the right of creative artists to collect the rewards due for their hard work.” As he walked out of the courthouse in early June following the judge’s dismissal of the case, West flashed reporters an ear-to-ear smile, pleased that his narrative of starving artists taking on an evil corporation had found some success. After the signing agreement, Activision stopped responding to questions about its battle with Respawn. A person close to Activision cited the terms of the settlement as a reason for its refusal to comment.

But the story wasn’t over. A person close to the company says that revelations about West’s erratic behavior at Activision, which came out during the depositions, upset Zampella. “Vince felt that Jason was sabotaging the company,” says the source. As the Respawn team scrambled to finish Titanfall, West was barely coming to the office. In March, he officially parted ways with his longtime partner, moving his family to North Carolina and leaving Zampella in control of Respawn. In an interview in April, Zampella refused to elaborate on what had separated them—except to say, “It’s hard to work with one person for 15 years.”

In the end, the battle over Call of Duty cost Kotick almost nothing. The three subsequent sequels to the Call of Duty franchise, produced without West and Zampella, have each grossed more than $1 billion. Activision’s stock is up 30 percent since their firing, and its chief executive made $64.9 million last year—second only to Larry Ellison among U.S. C.E.O.’s. Bobby Kotick lost the battle, but he won the war.

I last spoke with West in August. He seemed distant, and his words came haltingly. “It does sort of sour you on the industry” he told me. “It’s tough. If we can’t get treated well, what possible chance does a newcomer have? How do they prevent themselves from being strong-armed by the guys with the money? I wish I had the answer to that question, but I don’t.”